Clinic for the poor gets cash injection from Acumen fund

Acumen Fund has bought a minority stake in Miliki Afya Limited, a clinic chain that serves the poor.

Acumen’s $600,000 (Sh52 million) investment in Miliki Afya Limited will finance the healthcare chain’s five new branches in Nairobi.

The first branch, which will be based in Kawangware, is expected to its open doors at the end of this month. Miliki Afya currently has one outlet in Ngong, Kajiado County.

“We are keen to ensure that people at the bottom of the pyramid can access good quality healthcare at an affordable price. At the moment, patients have access to a qualified doctor with consultation costing from as little as Sh100,” said Miliki Afya chief executive and founder Ernest Mureithi.

Also Read

The CEO said Miliki serves between 70 to 90 patients per day. It provides diagnostic, laboratory, X-Ray and ultra sound services.

Acumen’s other notable investments in Kenya include a $1.35 million injection into Insta, a firm that processes fortified porridge formula for infants in 2008 and a $1.1 million investment in M-Kopa, which distributes solar lighters that are paid for via mobile phone money transfer services in 2011.

Dr Mureithi said Miliki Afya’s plan is to put up branches offering outpatient and diagnostic treatment to patients in densely populated urban and peri-urban areas.There also plans to put up branches in other parts of the country and then expand to the rest of the East African region.

Acumen said that the investment matched its criteria that looks for businesses servicing the low end of the market using a model that can be replicated.

“Miliki Afya has a sound and scalable business model with potential for delivering real impact to low income communities,” said Acumen’s director for East Africa Duncan Onyango in a statement.

Healthcare is attracting investors who are being drawn by the industry’s growing demand for quality service at an affordable cost.

“We are seeing more and more investments like this flowing towards companies that are bringing quality care to Kenya’s middle class,” Penda Health co-founder Nicholas Sowden told the Business Daily.

Penda Health, a chain that delivers maternal healthcare and targets the poor, plans to open four more clinics in densely-populated areas.

Abraaj Group, a Dubai-based private equity fund, and Swedfund, a State-owned venture capital firm, invested a Sh564 million in Nairobi Women’s Hospital in November 2013. Nairobi Women’s started as a rescue centre for women, but has grown into a big healthcare provider even for the middle class.

Abraaj Group’s investment was to fund the hospital chain’s regional expansion and to modernise its branches.

Demand for services like education has outpaced the State’s ability to expand access, opening up opportunities for private investors.

The International Finance Corporation (IFC) invested Sh860 million in Bridge International Academies, a company that invests in schools targeting the low-end of the market.

The IFC said that Bridge International Academies had shown that there was demand for high quality education at an affordable price even at the low-end of the market that can be serviced by the private sector.

“The education sector for the low income market is fragmented which results in inconsistent quality and higher costs. The Company (Bridge International Academies) will act as a consolidator in the sector and if successful will attract other companies to employ similar strategies, thereby improving quality and reducing costs of primary education in emerging markets,” said disclosure notes on the investment.

The IFC has also invested in Kenya’s healthcare industry having bought a 20 per cent stake in AAR Group for Sh348 million in early 2013.

A joint study by the IFC and global consultancy McKinsey said that healthcare in sub-Sahara Africa is a billion-dollar business that will grow rapidly in the next two years.